India's markets regulator proposes tighter regulations for custodians

BENGALURU, Nov 13 (Reuters): India's markets regulator on Wednesday proposed changes to the regulatory framework for custodians, including doubling their minimum net worth requirement.

Custodians provide services such as safekeeping of assets and maintenance of securities accounts for clients like foreign portfolio investors, mutual funds, and portfolio managers. Currently, India has 17 registered custodians.

Assets under their custody jumped to 278.5 trillion rupees by September 2024 from 2.7 trillion rupees in 2002.

Given the substantial growth, the Securities and Exchange Board of India (SEBI) has proposed to bring regulations in line with those for stock brokers.

It has proposed that custodians should have a minimum net worth of 1 billion rupees ($11.9 million) against 500 million rupees currently.